Claiming Children as Exemptions After a Divorce

Going through a divorce is difficult and trying even in the
best circumstances. The last thing that anyone would want to think about is
taxes. However, taxes are important. If children are involved, it is very
important to settle the issue of who gets the exemptions for the children on
their taxes.

At the Wright Services, we have seen several situations
where couples who are still in the middle of divorce proceedings are ordered
by the judge to file "married, filing jointly" on their tax returns, until the
divorce is final. This works, but both parties have to work together to get
the taxes completed in a timely manner.

Some situations involve where the couple clearly defines
who gets the exemption(s). Some examples of this would be one party gets the
deduction "every year" without fail, one party would get the deduction one
year and the other party the next year, and so on or in cases where there are
multiple children, one party would get the exemption for one child and the
other would get the exemption for the other child. These are just a few of the
most common examples. In the previously discussed scenarios the individual
receiving the exemption (if single), would be eligible to file with a status
of “head of household”.

This last example is really the ideal situation, especially
if you feel that the other party is not entirely responsible in getting
information timely, if one party in particular is paying the majority of the
expenses for the child, or if one party has sketchy or suspicious financial
data. This scenario also allows the party with the child exemptions to be able
to file as "head of household". However, if both parties file as "head of
household" and claim the same child(ren), then one party if not both parties
will end up filing amended tax returns. For this reason, it is important to
establish who gets the exemptions up front.

Finally, the KEY is to make sure that whatever the
exemption ruling for your situation is clearly spelled out in your final
divorce decree.

(This information is on page one of form 1040 and
1040x. Form 8332 may apply depending upon your situation)